Maruti Suzuki India, the country's largest carmaker by sales, has zeroed in on Gujarat for setting up a new manufacturing unit and is scouting for a location in that state, preferably near Ahmedabad, state government officials revealed today.

Sanand, where Tata Motors' Nano plant is located, is reported to be the most likely site for Maruti's new plant, which would have a capacity of 250,000 cars annually. This could be the company's first plant outside Haryana – where it has been located since its inception in 1983 – if matters work out out.

Gujarat is emerging as a strong rival to Tamil Nadu as India's automotive hub – apart form Tata, it already houses a General Motors plant at Halol. Hyundai Motor India and Ford India are also reportedly keen to set up plants in that state.

Peugeot and tractor manufacturer John Deere are also said to be exploring possibilities for setting up units in Gujarat – where the Indian plants of Bombardier and Asia Motor Works are also located. A number of auto component manufacturers are also in the process of setting up shop in the region.

Maruti Suzuki's proposed plant may be dedicated to export production of the Swift, Estilo and A-Star models, which it currently exports to Europe and Africa from Mundra port in the state.

According to one report, Maruti has nearly finalised a 500-acre plot next to the Tata Motors' Nano plant in Sanand – which is close to the Mundra and Kandla ports - but there is no certainty if this land can be procured.

According to Gujarat government officials, senior MSI executives met government representatives during the first week of May. The state government has apparently the Maruti options at Sanand, Halol and Dholera.